"USDCAD is likely to remain above parity in the near�term but should trend lower in the medium term" - Camilla Sutton at Scotiabank. The Canadian dollar (Currency:CAD) is higher as investors buy into higher-yielding and higher-risk assets. The euro Canadian dollar pairing is 0.26 pct down on Monday's closing level at 12840 at 14:15 in London. The pound vs Canadian dollar is just 0.07 pct down at 1.5970. The US dollar vs Canadian dollar rate is 0.54 pct in the red at 1.0259. Those currency analysts we follow agree that the CAD is likely to take its cues from the broader market. "We expect today’s range to fall between 1.0220 and 1.0320," says Camilla Sutton at Scotiabank. Going forward, "USDCAD is likely to remain above parity in the near�term but should trend lower in the medium term � The path of volatility in the most recent run up in risk is well below either the 2011 or the 2010 bouts of risk aversion and no where near the 2008 experience," says Sutton. According to Shaun Osborne at TD Securities the CAD will continue to be tied to the fortunes of WTI crude oil prices. In a note to clients Osborne says: "The CAD/S&P 500 correlation stands at 78% today (rolling 22-day basis) while the CAD/WTI correlation stands at 60%, according to our data. marginal new low for WTI crude futures takes this market to its lowest level since October. "This is not helpful for the CAD, even if the currency has been tracking risk sentiment (as reflected in the correlation with the S&P 500) quite a bit more closely than commodity prices recently. "Unfortunately, this implies that direction for the CAD will more likely be determined by the undertone of risk assets and, in the absence of any top tier data today, risk sentiment will be driven by the flow of headlines from Europe." However, Scotiabank have suggested that risk aversion even appears to be fading, with the VIX off its recent highs and having failed to break violent higher, much of the pricing appears to be increasingly Euro�centric. "This is encouraging. However for USDCAD, the deterioration in global growth is a significant concern," says Sutton. The outlook is dominated by Greek elections due this weekend, this will surely prove to be a key catalyst taking us into the next leg of the Eurozone crisis. Search... Advertisement Latest Content on The Site Canadian dollar outlook: Currency to remain above parity vs USD for now, trend is however lower Indian Rupee: Standard Chartered advise an 'underweight' approach to currency as USD strength expected to return US dollar demand never too far-off as investors find it ludicrous that Italy should help lend to Spain Pound to euro holding onto strong gains while pound to dollar 'didn't take long to recover losses' Australian economic snapshot: Finance lending figures provide a boost, but concerns as business confidence flops Canadian dollar and other growth-sensitive currencies drift lower as investors look to reverse heavy US dollar sell-off Initial optimism to Spanish bailout cools, GBP vs EUR bounces back Pound to euro in deadlock as the sterling is also a winner of the Spanish banking cash-injection, pound to dollar surges Canadian dollar: Short term outlook and forecasts from Scotiabank and TD Securities Advertisement About 'The Australian Dollar' Copyright 2011: "The Australian Dollar" and "AustralianDollar.org.uk" are brands of The Economy News Ltd - a company registered in England and Wales, Number: 7097773. Contact Us and Find Out More. The news items and information on this publication are provided in good faith that they are correct. However, no representation or guarantees regarding the accuracy of this information is provided. Use at your own risk. At no point does the information on this website constitute investment or trading advice, perceived or otherwise. You should always seek the opinion of a qualified foreign exchange broker or analyst before risking your investments on the foreign exchange markets.

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